An International Monetary Fund (IMF) team, led by Mission Chief for Ghana, Mr. Stéphane Roudet, concluded a series of meetings in Accra from September 24 to October 4, 2024. These discussions were focused on evaluating Ghana’s progress on reforms and priorities as part of the third review of the country’s three-year Extended Credit Facility (ECF) program. This program was originally approved by the IMF Executive Board in May 2023 for a total of SDR 2.242 billion (approximately US$3 billion).
At the end of the review mission, Mr. Roudet announced that the IMF staff and Ghanaian authorities had reached a staff-level agreement on the third review of Ghana’s economic program under the ECF. This agreement is pending final approval by IMF management and the Executive Board. Once approved, Ghana will gain access to SDR 269.1 million (about US$360 million), bringing the total disbursed amount under the ECF since May 2023 to SDR 1.441 billion (approximately US$1.92 billion).
Roudet noted that Ghana’s performance under the IMF-supported program has been “generally satisfactory.” All quantitative targets set for the end of June 2024 were met, and while there were some delays, progress on structural reforms continued. He praised the government’s policy efforts for delivering positive results, with economic growth in the first half of 2024 exceeding expectations. The growth, largely driven by sectors like mining, construction, and information and communication, broadened across multiple areas in the second quarter.
Inflation in Ghana has been on the decline, although the recent drought in the northern regions could affect agricultural output and put upward pressure on food prices. Roudet emphasized that the government’s response would help mitigate these risks. He also highlighted the Bank of Ghana’s commitment to maintaining a tight monetary policy to continue reducing inflation.
On the fiscal side, Ghana is expected to achieve a primary budget surplus of ½ percent of GDP by the end of 2024, despite challenges stemming from the drought and the energy sector. Discussions with the authorities focused on energy sector reforms, improving revenue collection, and controlling expenditure ahead of the December 2024 elections. Efforts to bolster social protection programs for vulnerable populations were also a key part of the discussions.
Ghana’s progress in restructuring its public debt was another highlight of the discussions. After restructuring its domestic debt in 2023 and reaching a Memorandum of Understanding (MoU) with the Official Creditors Committee under the G20 Common Framework, the government has now successfully completed the solicitation process to restructure its Eurobonds. The bond exchange is set to take place in the coming weeks. The authorities remain committed to engaging with external commercial creditors to reach an agreement that aligns with the program’s goals and maintains comparability in treatment.
The external sector also saw considerable improvement in 2024, with strong gold and oil exports and higher remittances contributing to the accumulation of international reserves beyond the program’s targets. Financial stability has been maintained, with progress in bank recapitalization and profitability.
During their visit, the IMF team held meetings with Finance Minister Adam, Bank of Ghana Governor Addison, and other government officials. They also engaged with key stakeholders across various sectors. The IMF team expressed appreciation for the constructive dialogue with the Ghanaian authorities and their continued cooperation.
SOURCE: https://dew360.net
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